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No Ringing Endorsement for In-App Ads

Most young adults aren’t crazy about the idea of in-application mobile ads, according to a new report from the Dallas-based research firm Parks Associates.

Per the study, Monetizing Downloadable Mobile Applications, 54 percent of adults 18-34 do not welcome ads within mobile apps. The remaining 46 percent of respondents claim to be either indifferent to in-app ads or willing to endure such messages in free mobile apps.

Does that mean Apple and Google’s efforts to push the mobile ad business forward will be hindered? Not quite, given the nascent stage of the market, said Parks analyst Heather Way. She noted that, “Ad buyers and sellers have the ability to deliver more relevant in-app ads, ones that are innovative and more engaging.”

More innovative, engaging mobile ads are a main driver of Apple’s emerging iAd strategy, noted Way.

Regardless of users’ early attitudes, Parks sees steady growth for mobile ads, in-app ads — and the application economy as a whole. The mobile app market in North American will reach $2 billion by the end of 2010, according to the report. By 2014, in-app ad revenue will exceed $860 million.

That’s not an insignificant sum, but paltry given the current estimates for online advertising as a whole — which will total $25 billion in the U.S. this year.

The big money in mobile, per Parks’ estimates, will be in paid mobile apps — which by 2014 should enjoy profits in the neighborhood of $4 billion. Typically, 30 percent of paid-app revenue goes to distributors (such as Apple), while 70 percent of those dollars go to developers.